A bumpy ride ahead

Economic uncertainty will keep stock prices volatile

The stock market’s gyrations over the past few weeks have reflected wild mood swings across the investor community. First, the benchmark Nifty dropped by about 40 per cent from its all-time high of 12,430 recorded on January 20, to a low of 7,511 on March 24. It has subsequently bounced by about 20 per cent to near 9,000 levels. Traders have become inured to huge daily swings. The partial price-recovery has come despite a bearish economic outlook and progressively negative forecasts. The Nifty is now trading at a current price-to-earnings ratio of 21 at a time when there is overwhelming